New tax rules leave landlords overpaying
Capital gains rules introduced in April 2020 require anyone who sells a second home to pay any tax due on profits within 30 days. But landlords must guess what their annual earnings will be know which rate to use – 18% or 28% for higher earners. Subsequently they risk overpaying and being forced to seek a refund months later if necessary. Chris Etherington of RSM said the new arrangement was “not fit for purpose”. “Lots of landlords have been without income for a long time during the pandemic and many do not know whether they will be lower or higher-rate taxpayers. The Institute of Chartered Accountants said the system was “incredibly inefficient” for both HMRC and taxpayers. It is in discussions with the tax authority to find a better solution, the Telegraph reports.